IASB chair highlights importance of connectivity in reporting
On 15 May Andreas Barckow, Chair of the International Accounting Standards Board (IASB), delivered a keynote address at the European Accounting Association (EAA) Annual Congress, emphasising the emerging importance of “connectivity” in financial reporting.
Barckow traced the evolution of connectivity, noting its absence in earlier frameworks but highlighting its current significance. He explained that while consistency and coherence have long been staples of financial reporting, the term “connectivity” now encapsulates the need for integrated, cohesive information across various reporting domains. This shift reflects a broader view of corporate reporting’s purpose, to encompass both financial and sustainability information.
Historically, financial statements were seen as the core of corporate reporting, with other information linking back to them. However, the rise of sustainability reporting, marked by the establishment of the International Sustainability Standards Board (ISSB), has brought a new dynamic. Stakeholders now expect a two-way connectivity, where financial and sustainability reports inform and enhance each other.
From our perspective, this emphasis on connectivity underscores the value of standards in reporting. To successfully navigate between different reporting domains, standardised, shared terminology, adaptable systems, and shared concepts are crucial. With ongoing collaboration – as we see elsewhere in this week’s newsletter – reporting silos can gradually be reduced, with the end goal of a global, comprehensive reporting system a real possibility.
For more insights into Barckow’s keynote address, read the speech here.
